HSBC posts Lm25.3 million six-month profit before tax

Last Monday HSBC Bank Malta plc's board of directors approved the group and bank interim accounts for the six-month period to June.

During the first half of the year, HSBC Bank Malta plc and its subsidiaries recorded a profit before tax of Lm25.3 million (€58.9 million), which represents an increase of 23.1 per cent over the Lm20.6 (€47.99) million earned during the same period last year.

The overall cost base was again flat and consequently the cost efficiency of business improved from 45.5 per cent to 40.1 per cent.

Increases in loans and advances and customer deposits, together with improved margins, generated a 19.1 per cent increase in net interest income. Sales of products and services, including insurance and brokerage, and trading profits, resulted in an 8.4 per cent increase in revenues arising from these activities.

Tax on profits was Lm8.5 (7euro;19.8) million, resulting in a net profit after tax of Lm16.8 (€39.1) million for the half year.

Total assets stood at Lm2,031.4 (€4,731.9) million, representing a 7.6 per cent increase over December 31, 2006. Within that figure, total loans and advances to customers increased by 4.4 per cent.

The board declared an interim gross dividend of 6.6 cents (15.4 euro cents) per share or 4.3 cents (10 euro cents) net of tax. The ordinary dividend payment of Lm12.5 million (€29.12 million) is 75 per cent of current profits attributable to the bank's circa 10,000 shareholders. A special gross dividend of 4 cents (9.3 euro cents), or 2.6 cents (6.1 euro cents) net of tax. Both dividends will be paid on August 22.

This will distribute a total of Lm20.1 million (€46.82 million) to shareholders who are on the bank's register as at August 8. Earnings per share increased by 24.9 per cent over the 2006 equivalent.

Share price performance was higher than the MSE Index. HSBC continues to maintain good liquidity and a strong capital position. The bank has a conservative policy to keep sufficient capital to meet normal regulatory and prudential levels and to fund balance sheet and business growth.

During the presentation, director and chief executive officer Shaun Wallis revealed the recent outcome of the Employee Focus Survey conducted in 2006, which had a response rate of 93% of employees.

Employee satisfaction reached 70% (66% in 2005), while 66% (57% in 2005) of employees were prepared to recommend HSBC to friends as a great place to work in.

Mr Wallis highlighted HSBC's role in Malta's economy. Today, HSBC Malta is one of the biggest employers with some 1,500 full-timers in the bank itself and over 250 full-timers in the call centre, with the latter number planned to increase to over 500 by December.

During the first six months of 2007, HSBC continued its market-leading role in Corporate Social Responsibility (CSR) activities in Malta. Total CSR expenditure is expected to be around Lm250,000 (€582,343) this year.

HSBC's involvement in the Maltese community will further increase as the bank is committed to contribute a minimum of Lm35,000 to each of its three local charitable funds, aimed at supporting Malta's children, the environment and Malta's heritage. A further Lm130,000 (€302,819) has already been given in support of charitable and philanthropic causes, NGOs, financial literacy projects, and sporting events.